Navigating Madison's Real Estate Renaissance: Insights from Sun Prairie's John Reuter at Integrity Homes

A recent analysis of the market signals that the mortgage lock-in effect, which had previously gripped the 2023 housing market, is finally beginning to thaw. Mortgage rates, commencing the month in the mid-6 percent range, have undergone a significant 25 percent drop from October's 20-year high of around 8 percent. This adjustment has translated into a notable $325 per month decrease (-12 percent) in the median U.S. housing payment, presenting a more attractive landscape for both buyers and sellers looking to re-engage in the market.

In Madison and the surrounding communities, we've observed a surge in sellers listing their properties. Discerning home buyers are actively participating in property tours and expeditiously submitting mortgage applications to gain a competitive edge. Several buyers have capitalized on low rates, successfully negotiating reductions ranging from $10,000 to $20,000 off the list price of homes. Notably, buyers are once again leveraging home inspections, a trend less prevalent in previous years.

Team Leader John Reuter of Integrity Homes in Sun Prairie emphasizes, "Right now is the perfect time to buy. Many buyers have re-entered the housing market, but there are still many on the sidelines. This allows buyers to take advantage of lower rates and negotiate on homes that have been on the market for a while." Reuter anticipates a substantial increase in buyers as more become aware and approach the end of their leases in spring and summer.

While the daily average 30-year fixed mortgage rate has experienced a slight increase to 6.78 percent as of Jan. 10, the weekly average has reached its lowest point since May 2023, standing at 6.62 percent. This stability in rates has spurred a surge in purchase applications on both a weekly (+6 percent) and monthly (+3 percent) basis. However, applications still lag behind on an annual basis, showing a decrease of 16 percent.

The upswing in mortgage purchase applications aligns with an improvement in the Homebuyer Demand Index, witnessing a 5 percent increase from December. This signals a proactive approach to real estate plans in 2024.

Year-over-year, new listings have seen a 9 percent increase for the four weeks ending on Jan. 7. Active listings have declined by 2.9 percent annually, resulting in a balanced market with a 4.2-month supply. The median days on market have decreased from 44 to 42 days, and the share of homes sold within two weeks has risen from 24 to 24.9 percent, indicating a renewed interest from homebuyers.

Real estate agents project that with lower interest rates and heightened activity, prices are likely to rise, potentially leading to more competitive bidding scenarios. Among metros, Austin, Fort Worth, San Francisco, San Antonio, and Philadelphia have experienced a decline in median sales prices. Nevertheless, pending sales have increased in several metro areas, including Madison and Milwaukee.

On the flip side, new listings have decreased in 10 metros, with Atlanta, San Francisco, Indianapolis, Providence, and Newark witnessing the most substantial drops in seller activity.

Our advice is if you are considering buying or selling this year, reach out to us and get the ball rolling. Whether you're a few months away or more, starting now will prepare you and put you in the best position to buy or sell. Feel free to give us a call, and we can discuss real estate or how chilly it is outside :-)

John Reuter | Integrity Homes | 608-669-4226 | john@integrityhomeswi.com

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